What Exactly Has Gone Awry at Zipcar – and the UK Vehicle-Sharing Sector Dead?
The community kitchen in Rotherhithe has distributed a large number of prepared dishes weekly for two years to pensioners and vulnerable locals in south London. However, the group's plans face major disruption by the news that they will not have use of New Year’s Day.
The group had relied on Zipcar, the app-based vehicle rental service that allowed its fleet of vehicles via smartphone. It caused shock across London when it declared it would shut down its UK business from 1 January.
This means many helpers cannot collect food from a major food charity, that collects excess produce from grocery stores, cafes and restaurants. Other options are less convenient, costlier, or do not offer the same flexible hours.
“It’s going to be affected massively,” said Vimal Pandya, the community kitchen’s founder. “Personally me and my team are concerned by the operational hurdle we will face. A lot of people like ours are going to struggle.”
“Faced with this reality, they are all worried and thinking: ‘How will we continue?’”
A Major Blow for Urban Car-Sharing
The community kitchen’s drivers are among over 500,000 people in London who were car club members, now potentially left without convenient access to vehicles, avoiding the burden and cost of ownership. Most of those people were probably with Zipcar, which held a dominant position in the city.
This shutdown, pending consultation with staff, is a serious setback to hopes that car sharing in cities could cut the need for owning a car. Yet, some analysts also suggested that Zipcar’s departure need not mean the demise for the idea in Britain.
The Promise of Car Sharing
Car sharing is prized by many urbanists and green advocates as a way of reducing the problems associated with vehicle ownership. Most cars sit as two-tonne dead weights on the side of the road for the vast majority of the time, using up space. They also involve large carbon emissions to produce, and people without a vehicle tend to use active travel and take public transport more. That helps urban areas – reducing congestion and pollution – and improves people’s health through increased activity.
What Went Wrong?
The company started in 2000 before its acquisition by the American rental giant Avis Budget in 2013. Zipcar’s UK income barely registered compared with its owner's overall annual revenue, and a loss that grew to £11.7m in 2024 gave little incentive to continue.
The parent company stated the closure is part of a “broader transformation across our global operations, where we are taking targeted actions to simplify processes, enhance profitability”.
Its latest financial reports noted revenues had fallen as drivers took fewer and shorter trips. “This trend reflect the continuing effect of the economic squeeze, which continues to suppress demand for non-essential services,” it said.
The Capital's Specific Hurdles
Yet, industry observers noted that London has particular issues that made it difficult for the sector to succeed.
- Inconsistent Rules: With numerous local councils, car-club operators face a mosaic of different procedures and prices that complicate operations.
- New Costs: The closure comes as electric cars becoming liable for London’s congestion charge, adding unavoidable costs.
- Parking Permit Disparity: Residents in some boroughs pay as little as £63 for a year’s electric car parking permit. A floating car club would pay over £1,100 annually, creating a major disincentive.
“We should literally be charged one-twentieth of a resident’s permit,” argued Robert Schopen of Co Wheels. “We’re taking cars off the street. We’re putting less polluting cars in their place.”
A European Example
Nations in Europe offer models for London to follow. Germany introduced national shared mobility laws in 2017, providing a unified system for parking, subsidies and exemptions. Now, the country has several shared cars per 10,000 people, while France has 2.1 and Belgium has 6.3. The UK lags behind at 0.7.
“The evidence shows is that shared mobility around the world, particularly on the continent, is growing,” said Bharath Devanathan of Invers.
He suggested authorities should start to view vehicle clubs as a form of mass transit, and integrate it with train and bus stations. He added that a potential operator was already seriously considering entering the London market: “Operators will fill this gap.”
What Comes Next?
The company’s competitors can roughly be divided into two camps:
- Company-Owned Fleets: Which own or lease their own cars. This includes Denmark’s GreenMobility, France’s Free2Move, and Germany’s Miles Mobility.
- Person-to-Person Rentals: Which allow users to rent out their own vehicles via an app – a kind of Airbnb for cars. Players include Britain’s Hiyacar and the US’s Getaround and Turo.
One company, a US-headquartered peer-to-peer platform, is assessing the UK gap. Rory Brimmer, its UK managing director, said there was a “big opportunity” to win more users. “A space exists that is going to need to be filled, because London still needs to move,” Brimmer said.
However, it could take a while for other players to build momentum. For now, more people may choose to buy cars, and many across London will be without a convenient option.
For Rotherhithe community kitchen, the coming weeks will be a scramble to find a solution. The logistical challenge caused by Zipcar’s exit underscores the wider implications of its departure on vital services and the future of shared mobility in the UK.